Tax credits will help the industry compete more effectively with other renewable energy sources
Los Angeles, CA (PRWEB) January 07, 2013
The Biomass Power industry has grown at a healthy rate in the five years to 2013. The federal government has propelled this growth with the implementation of tax credits through several pieces of legislation, including the American Recovery and Reinvestment Act of 2009, that encourage the expansion of biomass power facilities. Furthermore, the majority of states have enacted renewable portfolio standards (RPSs), which require local utilities to generate electricity from renewable power as a percentage of their total energy portfolio. According to IBISWorld industry analyst Eben Jose, “increased campaigning for green technology also has influenced industry performance by sparking interest in technologies that replace pollutant-generating energy sources, such as coal and gas.” As a result, industry revenue is expected to increase at an annualized rate of 9.5% over the five years to 2013 to total $820.3 million, including an 8.8% jump in 2013.
Federal government assistance and local government regulation regarding renewable energy has led to considerable growth in biomass power projects. The increase in projects reflects a triumph for government assistance in the industry, which normally meets difficulty competing against traditional energy-generation commodities, such as natural gas and oil. The assistance, provided in the form of federal tax credits and RPSs, has boosted biomass-electricity generation and helped it reach a level where it can compete with traditional energy sources. However, federal production tax credits for biomass power are set to expire at the end of 2013, which is expected to hinder growth for the Biomass Power industry going forward. Furthermore, “many states have found that emissions from biomass power generation actually exceed those of coal power generation, which will likely diminish RPSs that directly benefit biomass power over the next five years,” says Jose.
As it stands, the industry has a low level of market share concentration, partly because very few facilities are capable of truly substantial electrical output, and because it sells for so cheap compared with other forms of energy, only a few companies have invested he heavily into biomass energy. However, state and local government assistance is expected to continue to help industry players compete with other energy-generation technologies in the next five years by lowering the cost of biomass projects. Although market share concentration will not likely change significantly over the next five years, firms will be able to expand their operations, reaching a larger customer base. Additionally, the anticipated economic recovery over the next five years will contribute to more robust demand for electricity generators. As a result, industry firms are expected to benefit from the continued push toward renewable-power generation, which will lead to increased biomass-power output. Given these conditions, industry revenue is forecast to increase at a healthy rate in the five years to 2018. For more information, visit IBISWorld’s Biomass Power in the US industry report page.
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IBISWorld industry Report Key Topics
Firms in this industry operate electricity generating facilities (other than wind power and solar power), using biomass (e.g. agricultural byproducts, landfill gas and biogenic municipal waste). Subset of report: 22111C
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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